A. O. Smith (NYSE: AOS) and Kyocera (NYSE:KYO) are both large-cap industrial products companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.
A. O. Smith pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Kyocera pays an annual dividend of $0.95 per share and has a dividend yield of 1.4%. A. O. Smith pays out 27.5% of its earnings in the form of a dividend. Kyocera pays out 29.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kyocera has increased its dividend for 11 consecutive years. Kyocera is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings for A. O. Smith and Kyocera, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|A. O. Smith||0||3||4||0||2.57|
A. O. Smith currently has a consensus price target of $62.40, indicating a potential upside of 1.41%. Given A. O. Smith’s higher probable upside, research analysts clearly believe A. O. Smith is more favorable than Kyocera.
Volatility & Risk
A. O. Smith has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, Kyocera has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.
Valuation & Earnings
This table compares A. O. Smith and Kyocera’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|A. O. Smith||$2.69 billion||3.94||$326.50 million||$2.04||30.16|
|Kyocera||$12.70 billion||1.91||$965.73 million||$3.19||20.68|
Kyocera has higher revenue and earnings than A. O. Smith. Kyocera is trading at a lower price-to-earnings ratio than A. O. Smith, indicating that it is currently the more affordable of the two stocks.
This table compares A. O. Smith and Kyocera’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|A. O. Smith||12.18%||22.42%||11.96%|
Insider and Institutional Ownership
74.9% of A. O. Smith shares are held by institutional investors. Comparatively, 0.6% of Kyocera shares are held by institutional investors. 1.3% of A. O. Smith shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
A. O. Smith beats Kyocera on 11 of the 17 factors compared between the two stocks.
A. O. Smith Company Profile
A. O. Smith Corporation operates through two segments: North America and Rest of World. The Company’s Rest of World segment primarily consists of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas, gas tankless and electric water heaters, as well as water treatment products. Both segments primarily manufacture and market in their respective regions of the world. Its North America segment manufactures and globally markets specialty commercial water heating equipment, condensing and non-condensing boilers and water systems tanks. It also manufactures and markets in-home air purification products in China. It serves residential and commercial end markets in North America with a range of products, which include water heaters, boilers and other. It supplies water heaters to the residential market in China with a broad product offering, including electric, gas, gas tankless, heat pump and solar units, as well as combi boilers.
Kyocera Company Profile
Kyocera Corporation is engaged in various fields, from fine ceramic components to electronic devices, equipment, services and networks. The Company operates through seven segments: Fine Ceramic Parts Group, Semiconductor Parts Group, Applied Ceramic Products Group, Electronic Device Group, Telecommunications Equipment Group, Information Equipment Group and Others. The Company’s products include components for semiconductor processing equipment and flat panel display manufacturing equipment, information and telecommunication components, general industrial machinery components, sapphire substrates, automotive components, solar energy products, cutting tools, medical and dental implants, jewelry and applied ceramic related products, page printers and multifunctional products. It also offers information systems and telecommunication services, engineering business, management consulting business, materials for semiconductors, chemical materials and realty development business.
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